Toyota parts delivery scores with dealers

Same-day program cuts costs, boosts customer satisfaction

Parts Director Danny Perez can get parts the same day they're ordered, saving his Pennsylvania store $100 to $400 a day in rental-car costs.

Parts Director Danny Perez saves $100 to $400 a day in rental-car costs thanks to Same Day Service, a parts distribution program run by Toyota Motor Sales U.S.A. Inc.

His dealership, Team Toyota of Langhorne, near Philadelphia, which does 250 to 300 repair orders a day, pays $350 a month to participate in the program. Under Same Day Service, Perez can order parts in the morning and receive them by the afternoon, allowing his dealership to make repairs the same day.

The payback goes far beyond lower loaner costs.

"You don't have technicians standing around," said Perez. "You have a happy customer, and you have less expense because you don't have to do a rental. You can keep the well-oiled machine going."

Dealers also have a shot at boosting service revenues by selling additional services because they can get the parts they need the same day, said Neil Swartz, Toyota's general manager of North American parts operations in Torrance, Calif.

"Otherwise, they might have to forego selling the service or have the customer return for it," Swartz said. "That is all inconvenient for the customer and could create extra cost for the dealer."

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Swartz: Chance to raise revenue

Self pick-up

Toyota dealers inspired the creation of Same Day Service. Many said they needed to improve customer satisfaction by reducing service repair time, said Swartz.

"It really became a priority for us to see if this could be done," Swartz said. "For years, we offered dealers who were close to our parts distribution centers the chance to pick up parts."

But for those dealers farther than a 30-minute drive from a distribution center, Toyota needed a better solution. So it decided to bring the parts to the dealerships, sort of.

Participating dealers submit parts orders, usually by 10 a.m., to their local parts distribution center. Within a couple of hours, the center delivers the parts to a drop-off point, typically a centrally located dealership, where the other participating dealers then come to retrieve their parts.

The drop points are within a one- to three-hour drive from the parts distribution center. Dealerships that are farther than three hours from a parts distribution center are not part of the program because it's not possible to deliver parts the same day, Swartz said.

Participation fees vary, based on factors including the number of participating dealerships in the area. They also vary by logistical expenses, such as any tolls and the cost of paying for a driver to travel to the drop point.

Eight of Toyota's 12 parts distribution centers across the country are used in the Same Day Service program.

Perez's store is one of 472 Toyota and Lexus dealerships, out of about 1,400 in the U.S., that have joined the program, which Toyota launched in 2011.

The other dealerships don't participate generally because they are in rural markets and too far from a parts distribution center for it to work. Those dealerships usually receive parts the next morning.

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'More time'

Matt Leonard, parts director at Ira Toyota of Danvers in Massachusetts, joined Same Day Service when Toyota launched it. He pays $275 a month, but his rental-car costs are down 20 percent, or about $600 a month, and his customer satisfaction is up.

"Getting that customer out of the rental into their car as soon as possible is key," said Leonard. He doesn't have data showing that Same Day Service improved the store's customer satisfaction index scores, but anecdotally, he said, "It has made an impact."

Keyes Toyota in Van Nuys, Calif., is the drop-off point for the 18 Toyota and Lexus dealerships that participate in suburban Los Angeles. Dan Fisher, parts director at the store, says 14 of the 18, including his dealership, use the program every day.

Keyes Toyota does 4,000 customer-pay service repair orders a month. Having a part in hand the same day he orders it makes the $225 monthly participation fee well worth it, Fisher said.

"We spend over an hour and a half of employees' time just to process a part, store the part, call the customer to come back in for the repair, then write up a new repair order for the customer," Fisher said.

"We are always trying to find more time. Toyota's found us a lot more time."

And in the eyes of satisfied customers, he added, "Now, all of a sudden, we're heroes."